B&H takes a big hit
Nov 21, 2019 23:20:37 #
Many folks have high regard for B&H as an online retailer, but they've just been hit by a lawsuit from the NY state attorney general, suing for $7 million in missed payments. Allegedly, since 2006, B&H has offered “instant rebate” deals to customers, and according to the AG, even though the company actually sells product at a discount, it must still pay tax on the full undiscounted price. Over time, again allegedly, B&H received some $67 million in reimbursements, resulting in a $7 million tax obligation.
Tough times, it seems.
Tough times, it seems.
Nov 21, 2019 23:25:32 #
As many folks say in New York, an AG or DA can indict a ham sandwich.
As much as anything, this is about the state trying to grab every dime it thinks it's owed by businesses, and bleeding them dry in the process. Rebates whether mail-in or "instant" have long been problems with bookkeeping, and how they should be handled. Naturally, businesses want to pay the least in taxes, governments want the most.
This will wend it's way through the NY courts, and maybe into the Federal system. B&H is not the only one involved, I'm sure. Adorama among photo dealers, and likely electronics stores are likely going to be involved. Since the wholesalers and manufacturers aren't likely in New York, the Feds could get involved.
As much as anything, this is about the state trying to grab every dime it thinks it's owed by businesses, and bleeding them dry in the process. Rebates whether mail-in or "instant" have long been problems with bookkeeping, and how they should be handled. Naturally, businesses want to pay the least in taxes, governments want the most.
This will wend it's way through the NY courts, and maybe into the Federal system. B&H is not the only one involved, I'm sure. Adorama among photo dealers, and likely electronics stores are likely going to be involved. Since the wholesalers and manufacturers aren't likely in New York, the Feds could get involved.
Nov 21, 2019 23:27:37 #
Allegedly. It may in fact be true. Let's wait until the facts are in and the courts decides. I think innocent until proven guilty is still the law of the land. 
Nov 21, 2019 23:35:26 #
RBishop
Loc: Spokane Valley, Wa.
I wish them the best, I have bought from them for years now and have always been well satisfied. Ron B.
Nov 21, 2019 23:40:54 #
rdw845
Loc: San Francisco Area
The problem is with the term "rebate." When a product is on sale at a discount the tax is generally payable on the sale price. When the product is allowed a rebate (instant or otherwise) the tax is generally due on the full price before the rebate. I qualify the answer with "generally" because these are California rules. I am not aware of the detail of New York rules.
Nov 21, 2019 23:41:50 #
rdw845
Loc: San Francisco Area
I hope they are able to avoid the assessment. They are a great outfit and a very good source.
Nov 21, 2019 23:51:54 #
wrangler5
Loc: Missouri
pendennis wrote:
< snip > . . . this is about the state trying to grab every dime it thinks it can get away with claiming it's owed by businesses, and bleeding them dry in the process. < snip >
There, fixed it for 'ya.
Nov 22, 2019 02:09:40 #
Oh my yes. The State of New York would be so much better served it it ran B&H out of business.
Nov 22, 2019 07:54:27 #
jburlinson wrote:
Many folks have high regard for B&H as an onli... (show quote)
An accusation has been made, nothing more. NYS says that B&H's method of collecting sales tax is wrong. B&H says it isn't. According to Henry from B&H the company has been audited by the NYS sales tax dept multiple times since 2006 with no issues arising. It isn't unusual for the NYS Dept of Taxation and Finance to attempt to re-write the tax laws as it goes. They have tried it before and been shot down in the courts.
This issue, even if B&H were to lose, isn't going to shut down the company by any means but it more then likely will end up wasting the money of both B&H and the NY taxpayers, such as myself. The only ones likely to come out of this smiling are the lawyers.
Nov 22, 2019 08:48:14 #
LWW
Loc: Banana Republic of America
jburlinson wrote:
Many folks have high regard for B&H as an onli... (show quote)
In most, if not all, states a rebate to the consumer is taxable.
Nov 22, 2019 14:15:50 #
Harry0
Loc: Gardena, Cal
The case is built on fallacy and misdirection.
The State is going to try cherry picking judges and courts to set precedence.
IF they win, WE wll all lose. Did you pay less than MSRP on Black Friday? The State can subpoena the records, and tax you on the unpaid remainder- we can just take it off your rebate.
Oh yeah, that unpaid remainer? That's undeclared income! Taxes, fines, fees and penalties- rolling in!
I'm kinda curious.
We're cming up on the 4th decade of the 21st century.
A LOT of companies like B&H do more and more business online.
That storefront? Legacy. Nice. Handy. Appreciated. Lotsa local goodwill. Not as profitable as a website bot.
Doesn't New York even think other states will be seducing places like this if NY wins?
So, I'm wondering where companies like B&H will move to. I'll be guessing S Dakota.
The State is going to try cherry picking judges and courts to set precedence.
IF they win, WE wll all lose. Did you pay less than MSRP on Black Friday? The State can subpoena the records, and tax you on the unpaid remainder- we can just take it off your rebate.
Oh yeah, that unpaid remainer? That's undeclared income! Taxes, fines, fees and penalties- rolling in!
I'm kinda curious.
We're cming up on the 4th decade of the 21st century.
A LOT of companies like B&H do more and more business online.
That storefront? Legacy. Nice. Handy. Appreciated. Lotsa local goodwill. Not as profitable as a website bot.
Doesn't New York even think other states will be seducing places like this if NY wins?
So, I'm wondering where companies like B&H will move to. I'll be guessing S Dakota.
Nov 22, 2019 14:48:49 #
jburlinson wrote:
Many folks have high regard for B&H as an onli... (show quote)
If you look for the recent thread on this topic you will find everything already discussed in detail.
Old news.
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Nov 22, 2019 14:55:14 #
This isn't all that complicated (or unreasonable). If I buy a lens for $500 and mail in and eventually receive a $50 rebate from the manufacturer, I pay sales tax on $500 and pocket the $50.
If I buy the same lens with an "instant rebate" I shell out $450 and the retail merchant eventually receives a $50 rebate from the manufacturer. Same sales tax result -- tax is due on $500 but it's the merchant who pockets the $50.
There is some dispute as to what B&H has been doing in this circumstance. But I believe this issue came to light because of an employee whistle blower who filed what is known as a qui tam lawsuit, now being prosecuted by the state. As a result the whistle blower will get to share in any dollars the state might recover.
If I buy the same lens with an "instant rebate" I shell out $450 and the retail merchant eventually receives a $50 rebate from the manufacturer. Same sales tax result -- tax is due on $500 but it's the merchant who pockets the $50.
There is some dispute as to what B&H has been doing in this circumstance. But I believe this issue came to light because of an employee whistle blower who filed what is known as a qui tam lawsuit, now being prosecuted by the state. As a result the whistle blower will get to share in any dollars the state might recover.
Nov 22, 2019 22:32:08 #
Bill_de wrote:
If you look for the recent thread on this topic you will find everything already discussed in detail.
Old news.
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Old news.
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Interesting. That's why, before my op, I did a search for "B&H" and "B & H". It didn't produce any references to this lawsuit. Or, indeed, any articles later than 2017?
I'm tired of UHH'ers responding to posts by saying "old news", when the search engine doesn't work.
Nov 23, 2019 01:03:42 #
MichaelH
Loc: NorCal via Lansing, MI
jburlinson wrote:
Interesting. That's why, before my op, I did a search for "B&H" and "B & H". It didn't produce any references to this lawsuit. Or, indeed, any articles later than 2017?
I'm tired of UHH'ers responding to posts by saying "old news", when the search engine doesn't work.
I'm tired of UHH'ers responding to posts by saying "old news", when the search engine doesn't work.
The search on UHH is not very effective. You can use Google to search the contents of any website using this format in the Google search:
site:somesite.com your search terms
Examples:
site:uglyhedgehog.com B&H tax lawsuit
site:uglyhedgehog.com tripod travel carbon fiber
If you want to reply, then register here. Registration is free and your account is created instantly, so you can post right away.